MoneyGram to Settle Shareholder Lawsuit for $10 Million

By Phil Milford -
Jul 20, 2012

MoneyGram International Inc. (MGI), which
provides cash transfers worldwide, agreed to pay $10 million to
settle a consolidated 2011 lawsuit filed by an investor who
claimed he’d be shortchanged in a recapitalization plan.

The company, based in Dallas, designed the plan to let
controlling investors cash out about 29 percent of their $760
million investment in preferred stock, diluting common
stockholders’ value and voting power, Willie R. Pittman
contended in the lawsuit.

Company officials “deny all allegations of wrongdoing”
and the agreement “is not an admission as to any of the
claims,” lawyers for MoneyGram said in court papers.

The settlement, if approved at a later hearing by Delaware
Chancery Court Judge J. Travis Laster, provides for distribution
of the $10 million, minus legal fees and other expenses, to
shareholders of record on April 11, 2011, court papers show.

Plaintiff lawyers are asking the judge to award them $3.65
million from the settlement fund, according to court papers.

“We are pleased to have this behind us,” Patty Sullivan,
a spokeswoman for MoneyGram, said in an e-mailed statement. She
said the recapitalization was “a positive event” and has
increased “the attractiveness of our common stock.”